Enverus Intelligence® Research

An Enverus Intelligence® Research analysis of the energy transition 3Q24 earnings season found nuclear companies rose 459% year-over-year, reflecting a bullish trend driven by confidence in a supportive incoming presidential administration. Favorable policies and global decarbonization goals underscore the potential importance of small modular reactors to supply reliable, low-carbon baseload power. • Independent power producers (IPPs) experienced an 83% increase, driven by rising demand from AI data centers and electrification, with long-term contracts ensuring sustained growth. • Solar installers saw a 31% decline due to leveraged balance sheets, potential tax credit rollbacks and proposed tariffs, with only favorable interest rates as a positive factor. Keep up to date with our latest thoughts and analysis on the most challenging problems facing the energy industry by subscribing to Energy Transition Today. (https://lnkd.in/gWdkUpTS) Investment advisory products and services provided by Enverus Intelligence® Research, Inc. Visit https://lnkd.in/gbv4E7hH for additional information. #energytransition

The recent surge in data center development is driving the need for effective resource management in data center siting. Enverus Intelligence Research has developed a workflow using the Enverus PRISM® Power & Renewables suite to quickly and effectively screen for high-value sites. 💡 Key considerations in site screening include energy availability, site quality and energy costs, using metrics like available withdraw capacity, available acreage and access to transmission and fiber-optic networks. 💡 In a case study of the Cleveland area, Glenwillow and Hummel substations were found to be ideal for 1,000 MW projects due to their large AWC, while the Inland and Hummel substations were best for 600 MW projects. Keep up to date with our latest thoughts and analysis on the most challenging problems facing the energy industry by subscribing to Energy Transition Today. (https://lnkd.in/gWdkUpTS) Investment advisory products and services provided by Enverus Intelligence® Research, Inc. Visit https://lnkd.in/gbv4E7hH for additional information. #energytransition #datacenters

Following the FID of INEOS’ Project Greensand in Denmark earlier last week, the Northern Endurance Partnership consisting of BP, EQNR and TTE, reached FID on the Teeside CCS project in the UK. Once operational, these two projects will join Northern Lights and Porthos as the only CO2 storage options available in Europe and the UK. All four of these projects are planning to inject CO2 offshore with little to no onshore pipeline infrastructure leading to minimal landowners in the project footprints. With Wolf Midstream withdrawing its pipeline application in Iowa, the many permitting hurdles faced by Summit Carbon Solutions in the Midwest and concerns regarding USDW’s for onshore carbon sequestration, projects relying on onshore pipeline infrastructure and injection have faced several delays in the U.S. With the progression of these four projects through FID, offshore CCS continues to be the most successful pathway to in-service, enabling economies of scale and access to high quality storage reservoirs while minimizing landowner involvement. The U.S. will likely follow suit as federal offshore CO2 storage regulations are developed and finalized by the Department of Interior (DOI), a process that has been underway since 2021. With the change in administration, Trump has pledged to speed up permitting for major capital projects which could put pressure on the DOI to finalize the regulations. If these offshore projects are proven to be successful, it could help shift public perception of CCS and improve the prospects of onshore CO2 infrastructure, providing a boon to the broader CCS industry.  

The rapid adoption of artificial intelligence has created exponential demand for data centers. Hyperscalers such as Microsoft, Google and Amazon require reliable, low-carbon electricity to power future data centers, leading to a renewed interest in nuclear energy. • Favorable power purchase agreements (PPAs), like the Constellation Energy-Microsoft deal for Three Mile Island Unit 1, make repowering economic. New reactors need more initial investment, and Enverus Intelligence Research modeled an achievable ~10% IRR on a $100/MWh PPA at a $7 billion/GW capital cost. • Figure 1 illustrates the potential for expanding U.S. nuclear capacity to meet aggressive targets of 35 GW of capacity by 2035 and 200 GW by 2050. • Constellation, Duke Energy, Dominion Energy and Florida Power & Light operate sites that screen well for near-term construction starts, with Holtec International’s Palisades and NextEra Energy’s Duane Arnold sites already leading a new wave of nuclear activity. Keep up to date with our latest thoughts and analysis on the most challenging problems facing the energy industry by subscribing to Energy Transition Today. (https://lnkd.in/gWdkUpTS) Investment advisory products and services provided by Enverus Intelligence® Research, Inc. Visit https://lnkd.in/gbv4E7hH for additional information. #energytransition #artificialintelligence #datacenters #hyperscalers

Canada's largest renewable diesel (RD) producer, Braya Renewable Fuels, is considering idling its 18,000 b/d biorefinery in Newfoundland before year-end, citing weak margins and growing uncertainty around U.S. biofuels policy. Despite earlier plans to double capacity and add SAF production, the strategy shift reflects the looming expiration of the $1 USD/gal 40A blenders tax credit, which is set to be replaced in January with the 45Z tax credit exclusive to U.S. producers. The situation is further strained by recent updates to California's LCFS program, which limits credits for fuels derived from soybean oil—key components of Braya's feedstock mix. EIR anticipates continued downward pressure on RD margins and subsequent plant shut-ins in response to near-medium weakness in RIN and LCFS credit prices.

In our latest macro report, Fundamental Edge, Enverus Intelligence Research forecast that OPEC+ would not begin unwinding its production cuts until 2Q25. Today, OPEC+ announced they will be delaying their production hikes from January 2025 to April 2025. OPEC+ cites global demand concerns as its rationale, which EIR acknowledges in our latest Brent forecast. Of the official 2.2 MMbbl/d of production cuts, OPEC+ is producing ~ 1MMbbl/d above-quota. Therefore, the phase-out of cuts would increase production closer to 1.2 MMbbl/d by September 2026.